Global Dairy Demand On Strong Upward Curve

The demand for dairy products will continue to grow, likely to average 2.4% per year through the end of the decade, predicts Charles Brand, VP of Marketing and Product Management for Tetra Pak.

Brand led off Dairy Forum 2013 Sunday evening. He also predicted Latin America will become the second largest for liquid dairy products next year, surpassing Europe. All of this demand growth is fueled by a strengthening global economy and an emerging middle class whose buying power now commands more dairy products.

Innovation will be key to meeting this demand, he says. Smaller package size (rather than bigger, bigger, bigger) is one of these innovations. He notes that 2.7 billion of the world’s consumers live on $2 to $8 per day. "Decreasing package size makes it affordable," Brand says.

He notes that an Australian company can now package milk in Sydney and have it in Shanghai within 24 hours. Ironically, the push to get milk into China by Australian dairy farmers is fueled by a milk price war in Australia.

Australian supermarket chains have driven the price of milk down to $1/liter, the lowest it has been since the 1990s. In response, Australian dairy processors have innovated to move milk quickly to Shanghai to expand their market and profitability.

Today, McCarty Dairy Farm will be honored as the 2013 Innovative Dairy Farmer of the Year at the Dairy Forum’s award luncheon. The McCartys’ 7,000 cows supply all the milk for Danon’s yogurt plant in Fort Worth, Texas, in a unique partnership between the dairy farmers and Danon’s. The award is jointly sponsored by the International Dairy Foods Association and Dairy Today magazine. You can read more on the McCartys here.